Ratna Hidayati, Head of Data and Analytics, PT. Pegadaian (Persero)
Pegadaian is a state-owned financial services company in Indonesia. Established over a century ago, Pegadaian began its transformation journey at the end of 2018. Unlike banks that sell many all kinds of financial products, Pegadaian is widely known as a credit institution with pawning system, or ‘Gadai’ in Indonesian. However, with the proliferation of fintech startups , the pawn industry has experienced a very drastic change. Many new entrants are already achieving straight-through processes. They offer fast approval and many types of non-collateral loans.
Having more than 4000 branches across the country, the transformation focuses on reducing manual effort and accelerating the digitization of our business processes. To remain competitive in the market by bringing many innovations, we also use data analysis methods, both quantitative and qualitative, to understand our customers better. The first year of transformation, wefocused our analysis on segmenting, targeting, and positioning our customers. These processes have served a number of purposes, mainly for the innovation.
Pegadaian is non-bank financial institution. We realize it is impossible to target the entire market, especially because of regulation restrictions. Our regulations are different from banks.
We can’t conduct all types of banking business, or launch many types of loans. . Some innovations we created recently for our customers are the result of segmentation. For example, ‘Gadai On Demand.’ This service is created for tech-savvy customers who want to access our branch easily. This innovation is the company's continued commitment in welcoming the technological era. In collaboration with the most popular ride-hailing company in Indonesia, the concept of this service is to help consumers who want to pawn their jewelry, but do not have time to come to our branch. The company cooperates with on-demand transportation application to pick their jewelry up. Funds can be then transferred to the customer's account. Another example is ‘GadaiEfek’. This product is created for customers who like to invest. They can pawn their shares to buy other shares. This product is also created as one of our efforts to tap affluent and male customers.Currently women and poor people still make up a significant portion of our pawning customer base.
So, how we did segmentation? In the era where customer data grows at a faster rate than ever before, and with so many segmentation techniques floating around, it is easy to pick the wrong tool for the segmentation, especially when we try to use segmentation for the purpose of innovation. Pegadaian is required to continue to innovate, so we divide our customers into parts, which are definable, accessible, actionable, profitable, and have a growth potential. We segment our customers based on demographic characteristics, psychographic characteristics, and purchase behavior. However, since our goal is bringing new and improved products and services to market, those segmentations are not enough. We also use outcome-based market segmentation as the bases for segmenting our customers. This segmentation focuses on measurable activities that are underserved by the competition. Outcome-based segmentation also enables us to segment customers based on what makes them truly different. We found out it really useful to build valuable products or services, identify high-potential growth markets, and discover market entry points for disruptive technology.
By focusing on this goal, we don’t need to use all the data to conduct segmentation. It can cause an inability to address the key market challenges and we always try to away from meaningless customer classifications. With our big data platform, we already have all the data we need. All that remains is to apply the right segmentation and the right data. The possibilities for segmenting data are endless. Hence, we use and combine many segmentation approaches to help us keep innovating in the market and proactively gain a disruptive foothold into new markets. Indonesia has a large portion of unbanked population. We believe pawn industry still plays an important role in enabling people to obtain cash and loans, since they cannot participate in the standard banking system or deal with trust issues in fintech startups.